Emkay Global on Thursday said US tariffs have finally started to compound into stress across asset classes. It asked investors to increase their defensive exposure, recommending technology, pharmaceuticals, and private banking stocks, citing their low historic beta. The domestic brokerage said one may also trim exposure to smallcap and midcap stocks, given the inherent high beta and expensive valuations. Advertisement

"We think this is a passing phase, with a high likelihood of the trade deal concluding within 3-6 months. The good news is that the domestic economy is gaining strength and the earnings cycle has turned in the last 1-2 months. From a long-term perspective, we remain constructive on Indian equities, with consumer discretionary our most preferred sector," Emkay said.

Emkay G

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